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Business

TPG Capital’s ‘Dire’ fund performance

By
Josh Kosman
Published Nov. 9, 2013, 11:01 p.m. ET

When private equity giant TPG Capital chose the entertainment for its annual meeting last week, one has to wonder ‘what were they thinking?’

TPG — which is greatly underperforming its peers — this week had ‘80s rock group Dire Straits perform for the roughly 300 attendees, a source at the meeting said.

TPG Capital led the biggest buyout of all time, the $44 billion LBO of Energy Future Holdings, which is now on the verge of bankruptcy, and co-invested in the $28 billion buyout of Caesars Entertainment that is facing a similar fate.

Still, David Bonderman and other partners at the Scottsdale, Az. event presented a happy face.

Public records show for the period ending March 31, TPG’s $15.3 billion 2006 fund generated a negative 1.4 percent return.

Its $19.8 billion 2008 fund for the same period has an annual 8 percent return but with little more than 10 percent of the cash returned.

TPG’s peers Blackstone, Carlyle and KKR have all generated much better numbers from their pre-crisis 2006-era funds.

TPG told investors that it was planning to launch a new fund next year.

Well, at least it would be fitting if Dire Straits actually performed their hit song “Money for Nothing”.